Glossary definition

What is monthly recurring revenue (MRR)?

Monthly recurring revenue (MRR) is a measurement of the revenue coming in each month. It helps you see trends on a monthly basis. Investors will want to see a healthy projection, reflecting continued market growth.

As you add customers, you increase your MRR. As you churn customers or lose customers, your MRR will decrease. The lower the churn and lower customer acquisition costs (CAC), the better your MRR. MRR showcases the revenue predictability of a subscription business model.

To calculate MRR you add existing MRR to new MRR and Upgrade MRR and then subtract churn MRR and downgrade MRR. Many cloud accounting solutions for SaaS companies include a SaaS metrics dashboard and automate the MRR calculation with real-time data.

Subscribe to our Sage Advice Newsletter

Get our latest business advice delivered directly to your inbox.

Working from home with tea in hand